Mortgage loan

azari_2

I'm currently on a SVR mortgage with £100k outstanding. My rate is 4%. Unfortunately I don't have much collateral in my house so can't fix on a better deal. HSBC will lend me £25k for 5 years on 3.9%

I can afford the monthly payment on the loan.

Is it sensible to borrow the £25k and use it to pay £25k off my mortgage?

I'm unsure whether it makes financial sense. The headline figure of 3.9% seems like it's lower.

Any ideas?

Thrugelmir

Start overpaying your mortgage. Run through your household budget and see where savings can be made. As you owe less on your mortgage your LTV will progressively improve. Opening the doors to other mortgage products. 4% isn't a particularly bad rate.

azari_2

Cheers. I'm already overpaying by £500 a month. That's why I was tempted to go the loan route. As I could borrow £25k on a five year loan paying less than £500 a month. Plus the loan would be fixed at 3.9 while the SVR will probably rise quite soon.

I was just wondering if it made financial sense to borrow money on a loan to pay off a mortgage.